Thousands of new Atlantic City jobs were put on hold this week. Is that the fault of Casino Control Commission Chairman Matt Levinson…or former REVEL owner Glenn Straub? Read on and decide for yourself.
Straub feels that government regulations are the impediment, along with too much red tape. Straub (operating as a lessor under the name 500 Broadway) believes that since he’s leasing the casino to a third-party (Robert Landino), he shouldn’t personally need a casino license.
Straub attorney, the highly respected LLoyd Levinson defended the REVEL owner and sourced a section of the New Jersey Casino Control Act.
Listen to LLoyd Levinson defend Straub’s position >
According to LICENSING & APPLICANT ELIGIBILITY, and to the untrained eye….it kinda looks like Straub does NOT need a license since he will NOT operate the casino. But in Levinson’s remarks below, he strongly states that Straub has far too much control over the entire property, and has not sufficiently removed himself from future operations within that building. Thus, he would need a license.
(1) The commission, with the concurrence of the Attorney General which may not be unreasonably withheld, may determine that any person who does not have the ability to exercise any significant control over either the approved casino hotel or the operation of the casino contained therein shall not be eligible to hold or required to hold a casino license.
The Straub / Landino lease agreement: Ten / Landino would only control 900 of 1,500 rooms in the resort. Straub would control the rest.
This is not a lease of the entire casino hotel ( as Straub has pitched ) under the Casino Control Act,” said Levinson.
Casino Control Commission Chairman Matt Levinson Remarks from JAN 31, 2017
We are again here today on the application of 500 Broadway for a declaratory ruling on whether it needs any kind of license whatsoever since it leases parts of the former Revel building to a third party. We are not here today to determine the suitability of 500 Broadway, Polo North or Mr. Straub to hold any such license.
Casino Control Commission Chairman Matt Levinson continues…..
In my opinion, we could dismiss this petition for several reasons. We are asked to waive licensing for a landlord that does not own the land in question. The company that does own the land, Polo North, isn’t a party to this petition. Mr. Straub could have transferred the property to 500 Broadway, but he has failed to do so. But rather than deny this petition on procedural grounds and delay the process, we will deal with the substance of the request by Mr. Straub and his companies.
500 Broadway plans to lease portions of the complex – including all of the gaming space – to an unaffiliated company, Revel North Beach LLC., which does not currently hold a casino license.
Under Section 82 of the Casino Control Act, anyone who owns a casino hotel, is the lessor or lessee of a casino hotel or who has control over a casino hotel or the land it sits on is required to hold some sort of a casino license. Mr. Straub and his companies fit all of those categories.
The question of the license status of a landlord is not a new one, in fact, it is something this commission considered for the first time more than 35 years ago. In some instances, the owner of the property was required to get a casino license while in other cases owners had to get a Casino Service Industry Enterprise license. In this case, Mr. Straub has not asked for a ruling on what kind of licensure, if any, is required. He had that option. Instead he asks for a ruling that no license is required.
Given the extent of Mr. Straub’s control over the property and the state’s interest in upholding the Casino Control Act, I find it difficult to comprehend how Mr. Straub and his attorneys could suggest the state does not need to determine if he qualifies for any level of licensure.
Before us today is a different, a more controlling lessor-lessee situation than this commission has addressed in the past. Mr. Straub will lease only a portion of the casino hotel property to Revel North Beach LLC. and retain control over the rest of it. This is not a lease of the entire casino hotel property as envisioned under the Casino Control Act.
Mr. Straub proposes to maintain control over a significant portion of the facility. He created a proposal where the “approved casino hotel” would not include a third of the hotel rooms, retail stores, multiple restaurants and the public corridors throughout the property. That simply defies credulity.
We are not here to write this lease for the petitioner and say what terms would be acceptable. We are here to deal with the lease that the parties negotiated and submitted to us. We are not talking about a shopping mall where the landlord simply collects rent.
This isn’t a 99-year lease with a fixed rent. No, it is a request from someone who shares control over a property with a tenant with only a five- year lease that does not have a casino license. That is control. That is why 500 Broadway’s request must be denied. We would turn the Casino Control Act on its head if we permitted this applicant to avoid licensure.
The petitioner does note that the statute provides for a waiver of license requirements for good cause. But the petition provides no argument whatsoever on what that good cause is in this case. I recognize the social and economic benefits that reopening a casino hotel would have. I want to see this property reopen and see thousands of my neighbors put back to work. But the environment in Atlantic City does not change the requirements of the Casino Control Act. We will not undermine the policies of the act for that end.
I have a responsibility to protect public confidence in the gaming industry and to insure that the people who own and operate casino hotels in the state of New Jersey are people of good character, honesty and integrity and to turn a blind eye to a landlord who controls half of a casino hotel complex and all of the vital systems needed for a casino hotel to operate would be to abrogate the very oath I took when I became chairman.
The conclusion here is inescapable and it is clear. 500 Broadway clearly has the ability to exercise influence or control over the proposed casino hotel per its lease agreement.
As a result, 500 Broadway needs a casino license or a CSIE and Mr. Straub must be found qualified for that license. The applicant does not qualify for any waiver of a license, it has not shown good cause for a waiver and the Attorney General would not consent to issuance of any waiver.
Just to be clear, Mr. Straub does not need any license from this commission to own a hotel in Atlantic City. Mr. Straub does not need any license from this commission to operate a hotel in Atlantic City. But if Mr. Straub wants to own a hotel with a casino with these lease terms, he clearly needs a license. As the director aptly noted, Mr. Straub still owns all of the gaming equipment – which was permitted only in anticipation of his filing for a casino license.
Our decision today, does not, in any way, delay the opening of a casino. A license is required to operate a casino in New Jersey and right now, no one has a license for this property. Unfortunately, Mr. Straub, on multiple occasions, has misled people as he suggested he was ready to put thousands of people to work and open the facility, but that government regulations were blocking progress and creating red tape.
To the contrary, Polo North submitted an incomplete application with this commission almost two years ago and then took no action to complete that application for an entire year. That filing was superseded when 500 Broadway filed a complete application in March of 2016 in which it indicated that 500 Broadway intended to own and operate a casino at the property. The Division of Gaming Enforcement then commenced its investigation and the applicants urged the division to complete it on an expedited basis. The division did so and it filed its report on the suitability of 500 Broadway and its qualifiers on September 9, 2016.
Ten days before that report was submitted – almost 19 months after the first application for a license was filed and almost six months after the second license application was filed – 500 Broadway submitted the petition before us.
In it, the petitioner states it needs no license from us at all – no casino license … no Casino Service Industry Enterprise License …no license whatsoever.
In my opinion, this petition is another delaying tactic by Mr. Straub. Speaking as one commissioner, if he didn’t think he needed a license, he should have filed this petition almost two years ago. If he thought that as landlord he didn’t need a license, he should have filed eight months ago when he signed the lease. Instead, he waited until the casino license investigation was finished, the report nearly complete and we were ready to schedule a licensing hearing.
After 500 Broadway filed this petition, the Division of Gaming Enforcement reviewed it and, despite the fact that the regulatory charges had not been paid, filed a response with us on January 3. Mr. Straub’s attorneys filed a reply to that on January 5 and we put the matter on the agenda for the January 11 meeting. Less than two hours before that meeting began he caused further delay by filing major changes to the lease that very morning. Quite frankly, I take umbrage at his claim that we, in any way, have delayed this process.
I will make a motion to enter an order denying the petitioner’s request and that we set a date for a hearing on the plenary casino license request as soon as possible.
Casino Control Commission Chairman Matt Levinson Remarks from JANUARY 31, 2017
The Florida developer bought the former REVEL Casino in Atlantic City out of bankruptcy court in AUG of 2014.
Casino Control Commission Chairman Matt Levinson is the son of Atlantic County Executive, Denny Levinson.